Mass. tack­les health re­form costs

Mass. bills call for move away from fee-for-ser­vice

Modern Healthcare - - FRONT PAGE - Jaimy Lee

Mas­sachusetts hos­pi­tals sup­port the state’s new ef­forts to trans­form the way that health­care is paid for, but are con­cerned of­fi­cials may at­tempt to slow spend­ing too fast and that more reg­u­la­tion that could dampen the in­no­va­tion al­ready un­der way.

Six years af­ter pass­ing in­sur­ance re­form that re­mains the sub­ject of in­tense na­tional scru­tiny, law­mak­ers in Mas­sachusetts in­tro­duced bills in the House and the Se­nate that would en­cour­age a move away from a fee-for-ser­vice sys­tem and align the state’s health­care cost growth with its gross state prod­uct.

The leg­is­la­tion, in­tro­duced this month, is sim­i­lar in many re­spects.

Both bills would set a health­care cost growth bench­mark within half a per­cent of the gross state prod­uct for the first 14 years, re­struc­ture the state’s Di­vi­sion of Health Care Fi­nance & Pol­icy, and re­quire providers and pay­ers to pro­vide de­tailed in­for­ma­tion to pa­tients about the price of a med­i­cal pro­ce­dure.

“Our cur­rent health­care sys­tem re­wards high-vol­ume, ex­pen­sive care that is not nec­es­sar­ily higher in qual­ity,” Rep. Steven Walsh, a Demo­crat, said in a news re­lease. “This bill strikes the right bal­ance in con­trol­ling our ris­ing health­care costs while im­prov­ing the qual­ity of care that our pa­tients re­ceive.”

The Se­nate bill would set the an­nual cost growth bench­mark at 0.5% more than the pro­jected growth of the gross state prod­uct un­til 2015. The es­ti­mated gross state prod­uct for 2012 and 2013 is 3.6%.

The bench­mark would then be set as equal to the pro­jected growth of the gross state prod­uct for the next decade, while the House bill aims to re­duce the bench­mark to 0.5% be­low the gross state prod­uct’s pro­jected growth start­ing in 2016.

“We sup­port the idea of set­ting ex­pen­di­ture trends against to­tal health­care ex­pense and try­ing to ratchet those down over a rea­son­able pe­riod of time to be aligned with the state’s gross state prod­uct,” said Lynn Ni­cholas, pres­i­dent and CEO of the Mas­sachusetts Hospi­tal As­so­ci­a­tion. “We do not be­lieve that it is pru­dent to set a tar­get that is be­low gross state prod­uct in any way.”

Ni­cholas said it’s too early for the as­so­cia- tion to de­cide which bill it prefers. “There are mer­its in both,” she said. How­ever, the MHA does sup­port a vol­un­tary tran­si­tion away from fee-for-ser­vice pay­ments as in­cluded in the Se­nate bill, which would re­quire state-funded pro­grams such as the Of­fice of Masshealth to im­ple­ment new pay­ment method­olo­gies start­ing in July 2014. The re­quire­ment would not ex­tend to pri­vate health plans.

The House’s bill, which law­mak­ers say can bring in $160 bil­lion in sav­ings over the next 15 years, would man­date that state­funded pro­grams tran­si­tion to al­ter­na­tive pay­ment method­olo­gies by July 2014 and pri­vate health plans by Jan­uary 2015.

An in­crease in the state’s reg­u­la­tory au­thor­ity could serve as a bar­rier for hos­pi­tals as they move for­ward with other pay­ment ini­tia­tives, Ni­cholas said. “That’s the last thing we need in an en­vi­ron­ment that’s mov­ing quickly and re­quires in­no­va­tion,” she said.

Mas­sachusetts has been a key set­ting for pay­ment re­form ini­tia­tives. In 2009, Blue Cross and Blue Shield of Mas­sachusetts launched the Al­ter­na­tive Qual­ity Con­tract, a pro­gram where med­i­cal groups re­ceive an­nual pay­ments along with re­wards based on sav­ings and the per­for­mance tar­gets that they meet. Part­ners Health­care, a 12-hospi­tal sys­tem based in Bos­ton, is the largest sys­tem in the state based on bed count. It joined the AQC in Oc­to­ber and is also one of the state’s five par­tic­i­pants in the CMS Pioneer ACO Model pro­gram, a dis­pro­por­tion­ate share of the 32 ACOS par­tic­i­pat­ing in the Pioneer pro­gram na­tion­ally.

“We’re re­ally still in the process of re­view­ing both the House and Se­nate bills,” a Part­ners spokesman said. “At this point, we’re hopeful that the pro­pos­als work to build off of some in­no­va­tions al­ready un­der way in the mar­ket­place to ad­dress the is­sue of af­ford­abil­ity.”

In a re­port re­leased this month, the state’s Di­vi­sion of Health Care Fi­nance & Pol­icy re­ported that the state has some of the na­tion’s high­est health in­sur­ance pre­mium costs and “pre­mi­ums and claims ex­pen­di­tures con­tinue to grow faster than in­fla­tion, though the growth rate has slowed in re­cent years.”

The state’s dis­cus­sion about cost con­tain­ment has been on­go­ing, said Alan Weil, ex­ec­u­tive di­rec­tor of the Na­tional Academy for State Health Pol­icy. Gov. De­val Pa­trick in­tro­duced leg­is­la­tion in Fe­bru­ary 2011 that aimed to con­trol health­care costs and pro­mote the use of al­ter­na­tive pay­ment method­olo­gies.

“The need for a fo­cused ef­fort at pay­ment re­form and cost con­tain­ment is quite clear for Mas­sachusetts as it is for the rest of the coun­try,” Weil said.

The Se­nate is ex­pected to be­gin de­bat­ing the bill May 15. The House bill, which is in com­mit­tee, is likely to go to the House floor by June.

Both bills would es­tab­lish preven­tion and well­ness funds, re­quire the de­vel­op­ment of web­sites that would pro­vide pa­tients with price in­for­ma­tion, up­date health IT re­quire­ments and man­date a 180-day “cool­ing- off pe­riod” in med­i­cal- mal­prac­tice in­stances as well as al­low providers to apol­o­gize to pa­tients.


The health­care pay­ment bill in­tro­duced by Mas­sachusetts House Speaker Robert Deleo, cen­ter, will help lower fam­ily pre­mi­ums, law­mak­ers said.

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